Morocco’s Central Bank cuts key interest rate to stabilize prices & support economic activity

Morocco’s central bank has decided to lower key rate by 25 bps to 2.25 % to ensure price stability and support the country’s economic activity with the anticipated inflation evolution.

The decision was made by the Board of Bank Al-Maghrib during its meeting held Tuesday in Rabat of 2025. The Bank experts decided to cut the rate for the second consecutive time since last December after analyzing domestic and global economic developments, Morocco’s recent public policies, as well as the Bank’s medium-term macroeconomic projections.

The analysts of Bank Al-Maghrib highlighted the significant dynamics in non-agricultural sectors, particularly driven by investment, mainly in infrastructure. They also took note of the Government’s commitment to further consolidate macroeconomic balances while maintaining the momentum of reforms, as well as its recently adopted roadmap to boost employment, notably by stimulating investment by very small, small, and medium-sized enterprises (VSMEs).

As for the agricultural sector, production continues to suffer from unfavorable weather conditions, although with notable improvement since the beginning of this month.

After two years of high levels, inflation slowed significantly in 2024, to an average of 0.9 %. According to the Bank’s projections, it should accelerate, while remaining in a moderate level, to revolve around 2 % over the next two years. Core inflation stood at 2.2 % in 2024 and is projected to evolve around 2 % over the medium term.

Morocco’s non-agricultural growth has been estimated at 4.2 % in 2024. It should remain close to this level in the medium term, primarily driven by the surge in infrastructure investment. However, agricultural value added remains dependent on weather conditions, having contracted by 4.7 percent in 2024.

Based on a preliminary cereal harvest estimate by Bank Al-Maghrib of 35 million quintals and the expected improvement in non-cereal production, agricultural value added is expected to increase by 2.5 % in 2025 before jumping to 6.1 % in 2026, assuming a return to an average harvest of 50 million quintals.

According to the Bank’s projection, Morocco’s economic growth, estimated at 3.2 % in 2024, is expected to increase gradually to 3.9 % this year and 4.2 % in 2026